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ANNUAL MEETING OF SHAREHOLDERS
Kevin A. Lobo CHAIRMAN AND CHIEF EXECUTIVE OFFICER
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Special Guests
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FORWARD LOOKING STATEMENT This presentation may contain information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to the Rejuvenate and ABG II matter; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings as a result of workforce reductions and other restructuring activities. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
A copy of this presentation will be available for 90 days on the Events & Presentations page of the For Investors section of our website at www.Stryker.com.
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Call to Order
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Back Row: RONDA E. STRYKER ALLAN C. GOLSTON WILLIAM U. PARFET ANDREW K. SILVERNAIL SRIKANT M. DATAR, PH.D Front Row: HOWARD E. COX, JR. KEVIN A. LOBO ROCH DOLIVEUX, D.V.M. LOUISE L. FRANCESCONI
BOARD OF DIRECTORS
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Stryker Leadership Team
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STRYKER LEADERSHIP TEAM Front Row: RAMESH SUBRAHMANIAN, Group President, International KEVIN A. LOBO, Chairman and Chief Executive Officer YIN C. BECKER, VP, Communications, Public Affairs & Strategic Marketing Middle Row: BIJOY S.N. SAGAR, VP, Chief Information Officer KATHERINE A. OWEN, VP, Strategy and Investor Relations MICHAEL D. HUTCHINSON, General Counsel LONNY J. CARPENTER, Group President, Global Quality and Operations, and European Business Operations Back Row: DAVID K. FLOYD, Group President, Orthopaedics TIMOTHY J. SCANNELL, Group President, MedSurg and Neurotechnology WILLIAM R. JELLISON, VP and Chief Financial Officer STEVEN P. BENSCOTER, VP, Global Human Resources
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OTHER CORPORATE OFFICERS
DEAN H. BERGY, Vice President, Corporate Secretary
WILLIAM E. BERRY, JR., Vice President, Corporate Controller
JEANNE M. BLONDIA, Vice President, Finance and Treasurer
IRENE B. CORBE, Vice President, Internal Audit
DAVID G. FURGASON, Vice President, Tax
ELIZABETH A. STAUB, Vice President, Regulatory Affairs and Quality Assurance
BRONWEN R. TAYLOR, Vice President, Compliance and Risk Management
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DIVISION PRESIDENTS BUSINESSES WAYNE D. DAHLBERG, Performance Solutions
WILLIAM J. HUFFNAGLE, Reconstructive
VIVIAN MASSON, Trauma & Extremities
BRADLEY W. PADDOCK, Spine
MARK H. PAUL, Neurovascular
J. ANDREW PIERCE, Endoscopy
BRADFORD L. SAAR, Medical
SPENCER S. STILES, Instruments
BRIAN J. WHITE, Sustainability Solutions
REGIONS MAURICE BEN-MAYOR, South Pacific
XAVIER BERLING, Europe
LAURENCE F. I. HIPKIN, Eastern Europe, Middle
East, Africa
GRAHAM A. McLEAN, Japan
DAVID A. MURPHY, Canada
M. BRENT SCOTT, Asia
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CORPORATE COUNSEL & INDEPENDENT ACCOUNTANT
CORPORATE COUNSEL Richard C. Witzel Partner of Skadden, Arps, Slate, Meagher & Flom LLP INDEPENDENT ACCOUNTANT William P. Miller Partner of Ernst & Young LLP
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Voting on Proposals
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Business Update
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MISSION TOGETHER WITH OUR CUSTOMERS,
WE ARE DRIVEN TO MAKE HEALTHCARE BETTER.
INTEGRITY
We do what’s right
ACCOUNTABILITY
We do what we say
PEOPLE
We grow talent
PERFORMANCE
We deliver
VALUES
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2014 Sales $9.7B
GLOBAL MEDTECH LEADER
• Pursuing global market leadership in three segments
• Growing through business unit specialization
ENDOSCOPY: 14%
MEDICAL: 8%
SUSTAINABILITYSOLUTIONS: 2%
SPINE: 8%
NEUROVASCULAR:5%
NSE:3% CMF:
2% KNEES: 14%
HIPS: 13%
TRAUMA &EXTREMITIES: 13%
OTHERRECON: 3%
INSTRUMENTS: 15%
Chart1
Endoscopy
Medical
Sustainability Solutions
Spine
Neurovascular
Neuro Powered Instruments
CMF
Knees
Hips
Trauma & Extremities
Other
Instruments
Sales
ENDOSCOPY: 14%
MEDICAL: 8%
SUSTAINABILITYSOLUTIONS: 2%
SPINE: 8%
NEUROVASCULAR: 5%
NSE: 3%
CMF: 2%
KNEES: 14%
HIPS: 13%
TRAUMA &EXTREMITIES: 13%
OTHERRECON: 3%
INSTRUMENTS: 15%
0.14
0.08
0.02
0.08
0.05
0.03
0.02
0.14
0.13
0.13
0.03
0.15
Sheet1
Sales
Endoscopy14%
Medical8%
Sustainability Solutions2%
Spine8%
Neurovascular5%
Neuro Powered Instruments3%
CMF2%
Knees14%
Hips13%
Trauma & Extremities13%
Other3%
Instruments15%
100%
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HISTORY OF PERFORMANCE
$0
$2
$4
$6
$8
$10
1979 2014
$ Bi
llion
s
2014 Sales $9.7 Billion
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2.6% 2.4% 2.8%
4.2%
5.1%5.8%
0%
1%
2%
3%
4%
5%
6%
7%
2012 2013 2014MedTech Market** Stryker
* Removes the impact of changes in foreign currency exchange rates, divestitures (not applicable to Stryker) and the first twelve months of acquisition sales that affect the comparability and trend of sales ** Based on Company research of 20 representative MedTech companies
GROWTH AT THE HIGH-END OF MEDTECH Organic Revenue Growth*
Chart1
20122012
20132013
20142014
MedTech Market**
Stryker
2.8%
0.026
0.042
0.024
0.051
0.027
0.058
Sheet1
MedTech Market**StrykerSeries 3
20122.6%4.2%
20132.4%5.1%
20142.7%5.8%
Category 4
To update the chart, enter data into this table. The data is automatically saved in the chart.
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• Drive market adoption of robotic-arm assisted surgery
KEY GROWTH DRIVERS…
Mako Total Hip Arthroplasty (THA) Mako Partial Knee Arthroplasty (PKA)
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KEY GROWTH DRIVERS… • Expand portfolio and selling teams in high growth segments
- Extremities, Neurotechnology, Sports Medicine
ReUnion Shoulder Platform Trevo XP ProVue Retriever Pivot Hip Arthroscopy
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KEY GROWTH DRIVERS… • Accelerate growth in Europe and expand Trauson outside of China
Trauson Manufacturing European Headquarters in Amsterdam
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Small Bone Innovations, Inc. (SBi) STAR Total Ankle Replacement System
KEY GROWTH DRIVERS • Ramp up growth of recent acquisitions
Patient Safety Technologies, Inc. SurgiCount Safety-Sponge System
Berchtold Holding AG Integrated MRI Suite, including Stryker Navigation
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International (Developed)
24% United States68%
Emerging Markets
8%
ACCELERATING GLOBAL GROWTH
• Continue strong United States performance
• Grow in Europe behind new model • Recover in Japan
• Continue momentum in emerging markets - Focus in China, India & Latin America - Expand Trauson
2014 Sales
$9.7B
Chart1
International (Developed)
United States
Emerging Markets
Sales
Emerging Markets8%
0.24
0.68
0.08
Sheet1
Sales
International (Developed)24%
United States68%
Emerging Markets8%
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FOCUSED ON INNOVATION
• Demonstrating commitment to internal innovation
• Driving innovation with products and services
• Focusing on improved outcomes and delivering greater cost savings/efficiencies
+10% 3 Year CAGR*
R&D
* 3 year CAGR is for periods 2012 - 2014
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OPERATING LEVERAGE INITIATIVES
• Amplify the Global Quality & Operations cost reduction program
• Reduce inventories through product rationalization
• Drive SG&A savings via shared services • Simplify and rationalize our information technology footprint
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2009 2010 2011 2012 2013 2014 2015
CONTINUED STRENGTH THROUGH M&A
• Targeting core and key adjacent markets
• Accelerating our top line, driving innovation
Sonopet
Gaymar
Porex
Neurovascular
Orthovita
Memometal
Concentric
OtisMed
Ascent
Trauson
MAKO Surpass
Patient Safety Technologies
Berchtold Holding
Small Bone Innovations
CHG Hospital Beds
Pivot Medical
Core Business
Adjacency
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CONSISTENTLY STRONG BALANCE SHEET
• Strong balance sheet with $5 billion of cash at 12/31/14 and > $1 billion of net cash*
• Consistent capital allocation strategy – Acquisitions to drive sales growth and innovation – Dividends – Share repurchases
* Net Cash = Total Cash & Short-Term Investments less Debt
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-10%
-5%
0%
5%
10%
15%
20%
25%
30%
DecNovOctSeptAugJulJunMayAprMarFebJan
SYK +26% S&P +11%
2014 STOCK PRICE: STRYKER vs. S&P 500
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We are well positioned for the future as we continue to:
• Drive organic growth at the high-end of MedTech
• Deliver operational leverage
• Maintain a healthy balance sheet and cash flow generation
• Introduce a steady flow of innovation through R&D and acquisitions
SUMMARY
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Voting Results
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Q & A
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